Lending rates lowered for priority sectors
Lending rates lowered for priority sectors
Several local banks have cut lending rates offered to businesses in priority sectors and startups to 5.5% annually. The new interest rate applies from today, August 1.
Le Duc Tho, board chairman of the Vietnam Bank for Industry and Trade, also known as Vietinbank, told Nguoi Lao Dong newspaper that the interest rate reduction is in line with the policies of the State Bank of Vietnam (SBV) and the Government to encourage business activities and the country’s economic growth.
Also, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has applied the new rate at 5.5% per year, down one percentage point against the ceiling rate regulated by SBV, from August 1 until the end of the year. The rate cut is offered to priority businesses in the fields of export, supporting industries and advanced technology.
Besides this, BIDV has launched two credit lines worth a combined VND70 trillion, with the interest rate cut by 0.5 percentage point per year versus the current figure; the first credit line is worth VND60 trillion for small and medium firms, and the short-term package is worth VND10 trillion for micro firms and startups.
The Bank for Foreign Trade of Vietnam (Vietcombank) also applies interest rates for Vietnamese dong short-term loans at a maximum of 5.5% per year, dipping one percentage point versus the SBV’s ceiling rate. The rates are applicable to old and new loans taken out by borrowers in the priority sectors.
A Vietcombank representative told the paper that the interest rate reduction is being applied on a wide scale, with loans enjoying rate cuts accounting for 38% of the bank’s current funding for short-term loans and 20% of its total loan outstanding balance in Vietnamese dong.
Aside from State-owned commercial banks, joint stock banks in the country have joined the provision of preferential rates. According to Vietnam Technological and Commercial Joint Stock Bank, customers who are retailers, small and medium firms are subject to its preferential interest rates.
This is the second time year-to-date that local banks have lowered lending rates to support corporate customers. Early this year, four State-owned commercial banks---Vietcombank, Vietinbank, BIDV and Agribank---reduced their rates by 0.5 percentage point for companies in the priority sectors.
Economic experts said the lowering of lending rates was a sudden move, especially as deposit interest rates have continually been revised upward recently.
